Inside Parachute Home’s Community-Focused Expansion Plans

Inside Parachute Home’s Community-Focused Expansion Plans

August 10, 2018

The term ‘retail store’ isn’t in Ariel Kaye’s vocabulary. The founder and CEO of Parachute Home prefers to use “community centers” when referencing the digital-first bedding and bath brand’s physical locations. In true clicks-to-bricks fashion, Parachute is focused on cultivating its consumer community and providing value outside of just its European-made product. In this interview, Kaye shares how she built Parachute and its cult-like following, while also acknowledging the challenges of running a startup and the isolation that can come with being a sole founder. This episode is sponsored by Fuigo.

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Dennis Scully: From our headquarters in New York City, this is Business of Home. I'm your host, Dennis Scully. Every week I'll be talking to leaders and innovators from all corners of the home industry. I hope you'll join me.

Dennis Scully: We'd like to thank our friends at Fuigo for sponsoring this episode. In case, you're unfamiliar or have been living under a coffee table; hey, we don't blame you. Fuigo is the industry's most comprehensive project management software for design professionals. Meticulously developed alongside designers like you, Fuigo is tailored to the way you work and built to foster your success. Learn more at fuigo.com. That's F-U-I-G-O.com. And now, on with the show.

Dennis Scully: Hi. I want to say thank you so much for joining us, but really, we're joining you, in that we're in the cozy basement of your flagship store here in New York City. So, let's talk about the excitement around retail.

Ariel Kaye: Well for us, you know, we're in a category that is so tactile, and all about the sensation, and the feeling of the fabric. And from the beginning, my guess was that, I knew that retail was going to be important to the business, partially because this is a category where 90% of people historically purchased offline. So, it's a really natural behavior to go shop for these products in a physical environment.

Ariel Kaye: We also are a brand that's so focused on the customer and building community, and it's really exciting to do that when you're having those face-to-face interactions. And so, we view our stores as community centers. We sell products, but that's almost the secondary purpose of our stores. It's really all about connecting with people, and hosting events, and workshops. And the transaction's really important, but it's really a lot about the relationship, too.

Dennis Scully: Well so, and I had time to talk with some of the team here, all of whom are delightful, and are super bought-in to the brand, and talked to me a bit about having events in the store. Sounds like maybe there's going to be a calligraphy event coming up. And there are some different ways that you sort of bring people in after hours, and so that sounds really great. And is that part of the sort of community building that you do?

Ariel Kaye: Absolutely, yeah. And we really also look to be in neighborhoods that are not just shopping destinations, but also places where you can eat, where you can drink, where you want to just stroll, and where people actually live; which is unique, also, for a brand like ours, because in this category, most of the larger incumbents, if you will, or bigger-box retailers, they're going after massive square footage of real estate. And because we're going after the smaller footprint, we can be in these more quintessential, neighborhood communities.

Ariel Kaye: But yeah, that's absolutely a part of how we bring value to our customers, how we reengage our customers, how we create this real community. And we've found it to be really successful so far. It's been really fun, too. I mean, you just build a different type of connection with people when you're doing something besides just selling products.

Dennis Scully: Well, and it's interesting that there's almost sort of, I mean, you've only been here a short period of time, but it almost already feels like a little local store, people dropping in, and you definitely get that vibe.

Ariel Kaye: That's why we love retail so much, because it's not about this one-time purchase. We find that people are stopping in on their way to dinner, to buy a host gift, or you know, to buy a baby shower gift; or they bought towels, and they realize they love them. And they're like, "You know what? We want two sets of towels now," or, "We want three sets, and we want to do something different in our guestroom." And it just, we want to be part of that, you know, the vibrant of the neighborhood, and really a place where people can stop in just to say hi. And you know, we've got, in Venice, and that's where I spend most of my time, we've got this community of dogs that bring their owners in all the time, because they know that they can get treats, you know?

Dennis Scully: Right.

Ariel Kaye: And those are just fun things that we do. And you know, one of my favorite things that happened recently, we were having a pop-in in Venice. And I overheard this woman who had no idea that I was the founder of the company. I was just in there, looking around, and looking at the handbags and the jeans that we were selling of these other brands. And she casually said to one of the people working, "You know, I look forward to these pop-ins so much, because I discover my favorite new brands every time." And you know, I think if we can just do that for one person, we're doing something that's of value. And it's fun.

Dennis Scully: That's great. And it's fascinating that retail has become that now, a place to find community.

Ariel Kaye: I think it has to be in order to stand out. I mean, I think there's really no other option than to do more than just sell things. You have to create an experience for people that's memorable, that creates joy, and surprise, and delight, and is really authentic, also, to your brand. You know, it's hard to do these things without that authenticity, if it's not part of the whole brand ethos.

Dennis Scully: Yeah, yeah. So talking about brand ethos, and talking about sort of branding in general, you and I were starting to talk about your university studies in media, and social media, and sort of what you learned along the way, before you became a founder of this brand. And I'm really curious to talk with you about, what were some of the things that you learned, both ... So, you went to NYU, and then, later, got your master's degree from the New School, if I remember correctly.

Ariel Kaye: Mm-hmm (affirmative).

Dennis Scully: And you later went into advertising and worked with some big brands. And I'm curious what sort of really made an impact on you from what you studied, what you learned, that sort of formed some of your opinions around marketing and connecting with people.

Ariel Kaye: Well, I think what was so exciting about my time at NYU was, I was in the Gallatin School, so I got to create my own major. And I got to try a lot of different things as a result. So, I was able to create this topic of learning for myself, which I called "media power and persuasion."

Dennis Scully: Okay.

Ariel Kaye: And it was a little bit of this, and a little bit of that, and I was able to take classes in the business school. And you know, I took some pre-law classes, and I took media classes, and film classes-

Dennis Scully: How great.

Ariel Kaye: ... and I really got this like smattering of just so much knowledge. And it was perfect for a person like me, who is just endlessly curious, and often easily distracted, and you know, had a hard time really figuring out what my one passion was going to be.

Ariel Kaye: But in that whole process, I saw these similarities. And I also got to do a ton of internships, so I was working in a lot of different offices, which I think is a great way to see what you like and what you don't like, especially at that age.

Dennis Scully: Yeah, absolutely.

Ariel Kaye: And so, I realized there were a few things that were really important to me, and one was telling stories. I really liked hearing stories, and then also telling my own stories, and telling stories in different formats; so whether it was through video, or through the written word, or through singing. I did a lot of singing back in my college days.

Dennis Scully: Is that right?

Ariel Kaye: Yes.

Dennis Scully: So, was there a singing group that your university had?

Ariel Kaye: I was, by the time I was at NYU, I focused more, actually, on solo singing and voice lessons; less so for the purpose of becoming a professional singer. At that point, I had moved away from that as a notion. But earlier on, that was something that was very much considered.

Dennis Scully: That was something you thought might really happen?

Ariel Kaye: Yeah, absolutely. Yeah.

Dennis Scully: So that was a road not taken? Or you-

Ariel Kaye: It was a road not taken. I decided that I wasn't going to pursue a professional singing career. But it was something I spent most of my years, growing up, singing, and being classically trained, and doing a lot of solo competitions, and a lot of choirs.

Dennis Scully: How fantastic.

Ariel Kaye: Yeah. Now, it just comes out in karaoke, which is fun.

Dennis Scully: Is that right? And do you get to do that a lot?

Ariel Kaye: I enjoy karaoke.

Dennis Scully: Okay.

Ariel Kaye: And I hog the mic. And to anyone that does karaoke with me in the future, I apologize, but not really, because it's really where I thrive.

Dennis Scully: All right.

Ariel Kaye: But anyway, back to NYU-

Dennis Scully: Yes, back to your NYU days.

Ariel Kaye: ... I really found that I was also just really inspired, and this, I think, very much comes alive in how I built the business, in really connecting with people. There was this psychology of people, and media, and how we were affected by the world around us, that I found to be just super fascinating. And so, I took a lot of classes that touched on those subjects, and you know, got really excited by Marshall McLuhan, who wrote The Medium is the Message; and was just really fascinated about the way that the world was evolving, and the implications that it had on us as individuals, and then us as a community. And that's why I ended up going to get my master's in media studies at the New School, which is a program that Marshall McLuhan actually helped found, which was part of the reason that I ended up there, because I was a bit of a fan-girl.

Dennis Scully: Yeah. And why not? I mean, it's fascinating.

Ariel Kaye: Yeah. And so in my time at the New School, I was doing, you know, I thought I wanted to be a documentary filmmaker. I mean, what you'll, if ... Whether it's now or at another time-

Dennis Scully: There were so many paths you could have taken.

Ariel Kaye: ... I had a lot of possible paths.

Dennis Scully: Yes.

Ariel Kaye: And I was really, really curious. Like, I just was like, one day, I was going to be a documentary filmmaker; then the next day, I wanted to be in fashion, you know?

Dennis Scully: Right.

Ariel Kaye: And then, I wanted to be in the music business. And I really, I was able to create this world for myself where I could try a lot of things. And that was great. I think it also, at some points, it kind of worried people that I was never going to pick one and stick to it. But actually, it was during my time at the New School that I met someone else who was working in advertising, and who was actually an account planner, which is what I went on to do in the advertising world; which, for those of you who don't know, is really a strategic role within the company. So it's like, you do a lot of consumer behavior research. You're really the advocate for the customer, and you work closely with the creative team. And it's both a qualitative and quantitative type of role, which was perfect for me. But I didn't even know that existed.

Ariel Kaye: And so, I happened to become friends with someone who was an account planner at another agency, and she introduced me to the person that would be my boss. And that's how I ended up moving into the advertising world. But you know, again, it was like this through-path of wanting to connect with people, wanting to create things, wanting to tell stories, wanting to understand what motivates, and inspires, and creates curiosity among those around me.

Dennis Scully: Right, okay. And you were also sort of looking at where media was going, and-

Ariel Kaye: Absolutely.

Dennis Scully: Okay.

Ariel Kaye: And so that was, you know, something that I then continued to do in work, both at the ad agency, and then I was doing some freelance work on the side in social media. And I was going to South By Southwest very early on, and I started a blog in 2006. So I was like, I was really getting my hands dirty. And I was feeling very inspired by what was happening in the startup community in New York. And you know, it was actually through a lot of my friends, who had left their jobs to work at startups or start their own companies, that I started to think that that could be a path for me. And it ended up being the path, once I decided I was finished with advertising.

Dennis Scully: So, you sort of decided you were finished with advertising?

Ariel Kaye: Well, I hit a wall. I definitely found myself more frustrated than inspired. I wanted to be more entrepreneurial. I think one of the things that I've always really ... I've been happiest when I'm making an impact. And so, I like to affect change, and I like to be part of things that are moving forward, and I like to see progress, and I like to feel like there's a clear way forward. And in big companies and big agencies, sometimes that gets challenging.

Ariel Kaye: And so, you know, I was finding myself having to disconnect from the work I was doing because I didn't want to care so much about it, because then it didn't go anywhere, and I was really frustrated and sad, you know?

Dennis Scully: Oh, wow. Okay.

Ariel Kaye: Like, I wanted to be doing something where I was like, "I'm doing this. And look, there it is in the world. And there it is, affecting people." And I couldn't do that as much.

Dennis Scully: Right, right. Okay. So, a lot of committees, and a lot of, I mean-

Ariel Kaye: Yeah, it's like politics, you know? And you're also, when you ... It's really cool to work with big, big brands, but they also have a ton of politics internally, too.

Dennis Scully: Right, sure.

Ariel Kaye: So even if you can get your ideas pushed through on your side, then you've got this upward battle of getting them through on the other side, because they've got legal, and this, and that, and you know, a million people that have to approve something. And by the time it gets approved, it's like not even contextually relevant. You're like, "Well, we wanted that for last year-"

Dennis Scully: This isn't my idea.

Ariel Kaye: ... and, yeah, "And it doesn't even look like what we talked about. And now, it's like we're five years in, and we've got to start from scratch, guys." Yeah.

Dennis Scully: Yeah, yeah. Way to come around on that decision a little too late.

Ariel Kaye: Yeah, exactly, exactly. So, you know, those were just like little things. And as they started to add up, you know, I think I found myself, initially, really loving that world and wanting to climb this corporate ladder. And then it was like, "Yeah, you know, it's not for me."

Dennis Scully: Done with that.

Ariel Kaye: Yeah.

Dennis Scully: Okay. And so friends, or people that you knew were starting, or going to work for startups. And so, you were starting to get this bug a little bit, right?

Ariel Kaye: Yeah, absolutely. I mean, I think I was just seeing them, you know, relentlessly, tirelessly work, and cancel plans, and never want to hang out anymore. And they were just at work all the time, but like, loving it.

Dennis Scully: Right. And that seemed appealing to you.

Ariel Kaye: And that was like, "Yeah, I want to do that."

Dennis Scully: Yes. "I want to be part of that group."

Ariel Kaye: [crosstalk 00:13:24] It literally did, which is somewhat crazy, too. But it was really appealing to me. And I was like, "Look, they're making all this impact. They're like building these companies, and look at the progress." And you know, it was really, I found myself to be really inspired by that. And I think, you know, it's also been hugely helpful in my success so far, because I've had this community of friends who have also been entrepreneurs, and are either two steps ahead, or you know, and able to kind of coach me through some of these moments. But yeah, I found myself just wanting to do something different.

Ariel Kaye: And I think the other part of that is that I've always been obsessed with home and interior design. And so, you know, my blog that I started in 2006 was all about home, and design, and-

Dennis Scully: Home, right.

Ariel Kaye: ... doing like, DIY projects in my home, and fixing up bookshelves, and repainting things, and getting them featured on my blog, obviously, but sometimes others, too.

Dennis Scully: Okay. Yeah, and you were helping people with design projects.

Ariel Kaye: And I was helping, yeah.

Dennis Scully: Right.

Ariel Kaye: And it was something that I was good at, and I could see that, because I could see how much people were valuing my feedback and opinions, and letting me go pick out their furniture, and their bedding, and all sorts of things that they were going to live with and pay for. And I was just getting to make those decisions, you know? And so that, to me, was like the sign.

Ariel Kaye: And so in 2012, when I decided that I was going to make some changes in my life, it became, all of a sudden, this like, wait, now I could ... Maybe it's time to do something in home and see what that could look like.

Dennis Scully: But at the time, did you have the idea for bedding, and linens, and all of this? Or was it more, "I want to be in the home space in some way?" I mean, what was the idea?

Ariel Kaye: It was like, I wanted to be in the home space in some way. And then I looked around, and there weren't really many brands in the home space that I particularly wanted to work for. And then, I started thinking more critically about the home space. And you know, if, for some reason, I was going to do this crazy thing and start my own company, what would that be within the home space? And you know, by this point, it's the end of 2012, and there were a lot of direct-to-consumer ... Or not a lot, but there were enough direct-to-consumer businesses that were gaining momentum, and catching my eye, and also places I wanted to shop and engage with, that it felt like there was nothing in the home space, at that point, that was direct-to-consumer.

Ariel Kaye: I mean, this is pre, all of the mattress companies, and all of our direct competitors, and people that have since launched. And it felt like this, all of a sudden, when the ideas started spinning, and I thought more critically about the space, like there was this big opportunity that I needed to explore.

Dennis Scully: That you needed to go explore?

Ariel Kaye: Yeah.

Dennis Scully: And so, what was the first step for you? So, you announce that you're leaving the advertising agency, yes?

Ariel Kaye: Mm-hmm (affirmative), yeah. So, the idea for Parachute started before that. I started thinking more about the space. And for me, it was like, how do I connect with people? Where can I build this relationship and create value? And what is that purpose? And where is that place in the home that is really intimate? And I kept coming back to the bed and the bedroom, because it is all of those things. I mean, it's intimate, sleep, taking care of yourself, wellness. There's this intersection of health, and beauty, and all the stuff that felt really interesting; and had a lot of legs, and a lot of opportunity to create content, and just do cool stuff around.

Ariel Kaye: And so, I decided that sheets would be it, like that would be a great place to start. And then in February of 2013, had parted ways, and by March, was in Europe, visiting factories. So, it all sort of happened fast.

Dennis Scully: Right. It did happen fast, okay. And so, did you literally sort of ... I've heard you tell the story of hopping on the plane with a bunch of samples.

Ariel Kaye: Yeah, yeah. That happened, just like that.

Dennis Scully: Okay, just like that. So, you fly off to, what, to Italy, to Portugal?

Ariel Kaye: Portugal first, then Italy. Yeah.

Dennis Scully: Okay. And you're, what, sort of going around to different people and saying, "Here's what I want to do?"

Ariel Kaye: Yeah. I mean, I am just like Mary Poppins with a suitcase full of samples, and I'm showing up, and people are like, "Okay, fine. I'll take this meeting, but you're not really serious, right?"

Dennis Scully: Right.

Ariel Kaye: You know, I mean, I think that there was a lot of doubt, and a lot of, "Cool. You know, you've got a little presentation you can show us, and some pieces of fabric that you've cut up."

Dennis Scully: So, you had a presentation of what at the time? I mean, what-

Ariel Kaye: It was sort of a half-baked, not so much a business plan. It was less focused on the numbers, more focused on the vision. So it was like, "This is the opportunity in America. This is what I think is happening. You know, people are focused on thread count," which is absolutely not what they focus on in Europe. And so they were like, "Oh, yeah. That's so weird." And I was like, "And everyone, you know, people don't need to buy top sheets with their bundles." And they were like, "Yeah, we don't sleep with top sheets." And so, there was like some, you know-

Dennis Scully: Got it, okay.

Ariel Kaye: ... I was like, "I want to bring this kind of European style of bedding, and quality, and accessibility, to people like me, who really care about this stuff, and have no place to purchase, and want something better and different. And we're going to do it online." And you know, they were like, "Okay, sure."

Dennis Scully: But they didn't really get that. They didn't really get, you were just going to be this online brand-

Ariel Kaye: I mean, you know, it was a process.

Dennis Scully: Okay.

Ariel Kaye: But you know, we had these meetings, and it was eye-opening. And I got to, in some of those meetings, I got to tour actual factories and see how products were made, which, for me, was a brand new experience, and so cool.

Dennis Scully: Yeah, I'm sure. Very exciting.

Ariel Kaye: Yeah. I mean, it's really exciting to see machines of any kind, I think-

Dennis Scully: Yeah, I agree.

Ariel Kaye: ... you know, how things work is so fascinating, but sheets are made on these massive machines that span multiple, airplane-size hangars. And it's just a really wow-worthy experience. And so, that also just like continued to ignite this passion and excitement for me, because it was just a lot of, "Wow," and-

Dennis Scully: So, seeing the whole process made you even more excited about the whole thing.

Ariel Kaye: Yeah, totally just inspired, because you know, I was able to connect some of the dots, because I'd never made things before like this, you know-

Dennis Scully: Right, sure.

Ariel Kaye: ... besides my DIY shelves and things, and I didn't really make those. I just stuck stuff together. So, you know, seeing a fiber become a sheet was like crazy; and also, seeing the craftsmanship, and like, truly, the craftsmanship. I mean, these are people that have been in this industry forever, and you know, the factories that are over 100 years old; and you know, real artisans, and real people that are showing up to work every day, and whose skills have been passed down from generation to generation. And they care so much about the land, and the way that they're impacting their own communities. And it was just so inspiring, and really moving. I mean, and it like, I've never looked at a piece of fabric the same, you know?

Dennis Scully: Sure.

Ariel Kaye: I mean, it's like all of a sudden, these pieces of fabric have stories, and people, and just this amazing experience behind them. And then all of a sudden, I'm like, "And you can buy them for this cheap? Like, that's crazy." You know, and these are, it's like 50 people just touched this sheet, to make one sheet.

Dennis Scully: And it was still as inexpensive as it was for you to bring it over, and that's hard to believe.

Ariel Kaye: Well, yeah. I mean, well, being a direct-to-consumer business, you get to do all those things where you circumvent the middleman, and the retail markups, and all of these licensing and wholesale fees. And so, yeah, you can make things more affordable, and you don't have to skimp on quality to do so.

Dennis Scully: Right. So, you get home from Portugal. You are super excited. You're all charged up. And so, what's the next big step that you take in the process to really launch this?

Ariel Kaye: Well, I decided to move to LA, so that was sort of a step. It wasn't the step I needed to-

Dennis Scully: And so, what was that about? I mean, I know LA was home-

Ariel Kaye: I'm from there.

Dennis Scully: Okay.

Ariel Kaye: Yeah. So I think, you know, part of my dissatisfaction with ... I just had been in New York for a long time and was ready for something new.

Dennis Scully: Okay. Had New York lost its charm for you a little bit?

Ariel Kaye: No. I mean, I love-

Dennis Scully: You can say it. It's okay.

Ariel Kaye: No, I love New York, and I always will love New York. But I think I was just, you know, I'd been here for almost 10 years, and I was longing for something different. And I think there was a part of me that was like, "Let's just make this really interesting. I will move out of the apartment I've been living in for seven years. I will leave my job that's paying great, and where I feel very comfortable. I will start a new business, and I'll move across the country, and I will just flip everything on its head and see what happens," you know? So-

Dennis Scully: How courageous of you. Okay.

Ariel Kaye: Yeah. But I also had been thinking about moving back to LA. And you know, I think it may have been a really hard winter. It was like really cold.

Dennis Scully: Yes, and that will do it.

Ariel Kaye: Yeah.

Dennis Scully: I mean, that can break you if you're not from here.

Ariel Kaye: Yeah. I mean, I think for me, I think the good side of having a lot of friends that were entrepreneurial and had founded companies, is that I didn't have the most idealized experience of what this was going to be like. I certainly, you know, was like, "Oh, I had this great idea. It's a great idea, so I'll be able to raise money really quickly, and I'll be able to pay myself a salary. And these things will happen in three months," you know? And that was so far off, and so wrong. But I also knew that I was going to be embarking on this year process, that was going to push me to all of my limits, and was going to be really dark sometimes, and really exciting sometimes; and like, the highs and lows were going to be really intense. And so-

Dennis Scully: So, you knew all of this going into it. This is what you were telling yourself?

Ariel Kaye: I knew that, and I still was fine, and ready to do it.

Dennis Scully: Okay.

Ariel Kaye: But I guess my point is that I was like, "Maybe being by the beach will be better than being in a cold-"

Dennis Scully: You thought that might soften it somehow, make it a little more palatable.

Ariel Kaye: Yeah, that might ... Yeah, because I do enjoy being outside. And so, there was a part of me that wanted to be able to surround myself in a climate that was a little less harsh.

Dennis Scully: Right, okay. Okay. So, you move back home, right?

Ariel Kaye: Yeah.

Dennis Scully: And then what?

Ariel Kaye: And then I started-

Dennis Scully: Did you move in with your parents at first? Or did you-

Ariel Kaye: No, I actually [crosstalk 00:23:23], there was a short landing period there, but then I got an apartment.

Dennis Scully: Because that's a lot to take on, right?

Ariel Kaye: Yeah, no. They were as equally not as enthusiastic about me moving in with them as-

Dennis Scully: Okay.

Ariel Kaye: Like, "We really like our life, actually, without you in it."

Ariel Kaye: Yeah. "Dinner's fine, but then please see yourself out," in a nice way.

Dennis Scully: I'm sure.

Ariel Kaye: But, so we ... Yeah, I mean I guess at that point, I had some mentors, and I had people that I was working with a lot to help me navigate the process. But I needed a little bit of capital. I knew that I needed to work closely with our manufacturers ... At that point, I had decided on one manufacturer ... to figure out costing, and samples, and all of those things; and then, also, building a website. So, those were kind of the biggest; and then, yeah, trying to figure out an ongoing, sustainable way to keep things afloat.

Dennis Scully: Yes. And so-

Ariel Kaye: Just small things like that.

Dennis Scully: Just small things like that, just keeping the whole thing going. So, did you sort of know right away that you needed to get some money from somewhere? Was that sort of the first big need?

Ariel Kaye: Yeah, I did. I mean, I didn't have enough savings, and I didn't have parents who were willing to support it. I mean, it's just really expensive to start a business.

Dennis Scully: Sure.

Ariel Kaye: And you know, it's hard to save money when you're young in New York. And so, I was able to bring on a little bit of capital from a friend, and some of his friends who were angel investors. And that allowed me money to, basically, get a website on its way to being built.

Dennis Scully: Okay.

Ariel Kaye: Yeah.

Dennis Scully: Okay. So you were able to, with just your concept and what you could show, you got enough people to sort of take a leap of faith?

Ariel Kaye: It was a very small amount of money, but yes.

Dennis Scully: Very small amount of money, okay, so a small leap.

Ariel Kaye: Yeah.

Dennis Scully: And it was enough to ... Was it enough to get your web developer-

Ariel Kaye: [crosstalk 00:25:14] It was enough to get it started and to get some initial branding. You know, I started talking to investors almost immediately. And they were like, "Great. So, come back when you've got some more." And so, I started to figure out ways that I could show people progress. And at first, that was happening like every two weeks, sometimes a month. You know, like, "Okay, in the past month, I've done this, this, and this." And then as it got closer to launch, and as it got closer to like, "Okay, I really need some money," it was like a weekly basis. But yeah, I mean, I learned that you've got to figure out ways to show what you're doing, even if it's small.

Dennis Scully: So, incremental progress is what they want to see, right?

Dennis Scully: That's a lot of what they want to see in the beginning, right?

Ariel Kaye: Yeah. They're trying to connect the dots, I think.

Dennis Scully: Sure.

Ariel Kaye: So it's like, you know, it's ... People often talk about wanting to build relationships with founders. And so, yeah, they're doing that. And they're just seeing what progress looks like, and how fast it's happening. But so, you know, I was getting some inventory samples and things like that. And, yeah.

Dennis Scully: And in the beginning, a lot of the money had to go to inventory, right? Which, I mean-

Ariel Kaye: Well, I didn't need to ... Yes. I mean, I was paying for shipping for samples, but not actual samples themselves. I don't think, I honestly, it's hard to remember.

Dennis Scully: It's a blur now.

Ariel Kaye: Yeah. But yeah, I mean, it was really, actually, going to the web development. Yeah, [crosstalk 00:26:48] to like get a website up was more expensive. And then, I did join an accelerator in the fall. And that gave me a check in exchange for equity, and I was able to buy our first batch of inventory, and to get the website completed, and launch.

Dennis Scully: And explain for listeners who might not be familiar what an accelerator is, just so that they can get a sense of-

Ariel Kaye: Yeah, sure. So, this is a program for really early-stage founders. And it's often a place ... It not only provides you with some capital, but a place to work. So for me, that was really important. I was a sole founder. I was working out of my apartment. It was pretty sad.

Dennis Scully: It was a little lonely. Sure, sure.

Ariel Kaye: I was lonely. I didn't feel like I had a support system, although I had these friends, but not a day-to-day, like, "We're all in this together."

Dennis Scully: Right.

Ariel Kaye: So, this accelerator also introduces you to a lot of investors, or mentors, or people that can be helpful. And you know, they're giving you a stamp of approval that then opens you up to these, you know, the ability to talk to investors and other people that may be harder to get in touch with; because investors, and especially seed investors or early-stage investors, are looking to the accelerators to say, "Oh, who are the new, up-and-coming businesses that we should be looking out for?"

Ariel Kaye: So, it was great for me. I mean, I was a sole founder. I needed, desperately, some human connection. And you know, what I saw early on, and I think one of the reasons why I also love talking to other founders and people all the time, is that, you know, even if you're in completely different types of businesses, you're all sort of trying to do the same thing. It's like, how do we get customers, or viewers, or users, or whatever it might be for you?

Dennis Scully: Something that shows traction, whatever it is. Sure.

Ariel Kaye: Yeah. How do we create a product, or an MVP, or something that we can show for? And you know, how do we, yeah, how do we create value? I mean, there's like a lot of similarities, and you can be building completely different businesses. So, it was really helpful for me to be able to sit around the room. And you know, all of a sudden, working at 2:00 AM was fun, because I had people around me, and I wasn't just in this sad, dark apartment by myself.

Dennis Scully: You weren't all by yourself in the whole thing, right?

Ariel Kaye: Yeah, exactly. And then, I was meeting a ton of people. So I, all of a sudden, felt connected to the LA ecosystem, and I was meeting potential investors and mentors. And you know, I was getting advice, and I was getting feedback. And I was able to brainstorm, and all these things that are super helpful, especially when you're a sole founder.

Dennis Scully: Sure, a sole founder, which is especially hard, doing it all by yourself.

Ariel Kaye: Yeah. I mean, you know, the grass is always greener. I think it's hard, no matter what, but yes, it can be particularly isolating and challenging sometimes when you are alone.

Dennis Scully: We're going to take a quick break for a word from our sponsor, but we'll be right back.

Dennis Scully: To stand out in this crowded industry, you need more than a love of design. You need strategy, sales, marketing, and other things they don't teach you in design school. This episode is brought to you by Fuigo, whose mission is to empower the design trade. Fuigo believes that business and art can and must coexist, and they've built a platform to make that happen. Learn more at Fuigo.com. And now, back to the show.

Dennis Scully: So, at what point were you ready to sort of ask for your next big investment in the business?

Ariel Kaye: So, I launched in January of 2014. And in the first six weeks, I sold what, at that point, was a lot of inventory. So, we got some great press off the back. And I, you know, it went from like, every order was someone that I could vaguely track through a friend or a family member, and you know, it was like six degrees of separation at best; to, all of a sudden, we're getting 30 orders a day. And they were from places I had never even heard of, and people that I definitely had no connection to. And you know, there was this progress happening, and this momentum, and I guess what they call product-market fit was becoming more apparent. And I was running out of inventory.

Ariel Kaye: And so, the thing about inventory businesses is that you need it to sell it. And so I became really focused, pretty quickly, on getting some capital so that I could get a replenishment of inventory, I could get more product, and I could continue to do what I was trying to do. So at that point, it was a little bit easier, because that progress that people were talking about, I could actually show. And I had some numbers, albeit-

Dennis Scully: You had real sales.

Ariel Kaye: ... they were small.

Dennis Scully: Sure.

Ariel Kaye: And you know, it wasn't like I had historical data, but it was still something. And for that stage of investor, they're not looking for ... They're looking for these ideas that have momentum, have virality, have this buzz around them, and are clearly on a path.

Dennis Scully: Yes. And did they understand this space when you explained to them what you were doing?

Ariel Kaye: Some of them did.

Dennis Scully: Okay, some of them.

Ariel Kaye: Yeah. I mean, I think the home category is interesting, because it's not a category that has a lot of comps, and it's not a category that has had a ton of startups find success. So, and that's changed, but at this point, in 2014, there was less to map against. And investors, like it's helpful for investors when they have things to compare to.

Dennis Scully: Sure.

Ariel Kaye: And there's, you know, whereas in fashion, or in beauty, like there's just a lot of other kind of direct paths that they could track. So, you know, it was definitely a challenge to find people that were really excited about this space. But I think, especially at that stage, people are really investing in you, the entrepreneur. So for me, it was all about selling my vision, selling who I am as a person, and-

Dennis Scully: And your energy, and your passion, right?

Ariel Kaye: Yeah, exactly.

Dennis Scully: That's so much of what they want to see.

Ariel Kaye: And like, you know, I'm going to do this, and it's like, with or without you, type of vibe.

Dennis Scully: Yes, okay. And so you showed up, and you said, "I've got these sales, and people are buying the product. And it's no longer friends and family, but these are real customers."

Ariel Kaye: Yeah, and it's continuing, it's sustaining. And we keep getting press, and we keep getting more sales. And we're seeing this growth, and it's up and to the right, which is what everyone wants.

Dennis Scully: Yeah. It's at the hockey stick, it's going, right?

Ariel Kaye: Hockey stick, yeah.

Dennis Scully: Yes, okay. So, you get some investment, and you get inventory. And at what point are you going, to yourself, "Yes, this really is going to work, because we really are getting traction?"

Ariel Kaye: You know, I mean, I think hearing from customers that they were really excited about the brand was a really nice validation point. The problem was that, in that first year, we didn't have anything to base our sales or our inventory buying off of. And so, we were just like, it was just a constant struggle, you know? And so, we were in stock, and then we'd have this big press event. And then, we were out of stock for three months. And you know, you're like, "Three months? Like this is, we're done. That's it. There's no way we'll come back from this. People are upset." You know, we thought that doing pre-order was a great idea, but then we were selling through our next inventory with pre-orders. And then, people were getting pushed another three months. You know, we've got this lead time. So, you know, it was dicey.

Dennis Scully: Yeah. Well so, did you have a planner at the time? I mean, who had joined your team by this point?

Ariel Kaye: At this point, I hired someone who originally, I mean, was the director of operations, but that was just because he did everything that I wasn't doing. And he's still on the team, not the director of operations.

Dennis Scully: Okay.

Ariel Kaye: You know, I think one of the things that I learned quickly was just, you know, find ... Your first hire has to be someone that can do everything, or anything that you don't want to do, essentially.

Dennis Scully: Right. So, which was what? So, what were the things you didn't want to do?

Ariel Kaye: So for me, I was like, I want to do with product. I want to talk to my customers. I want to be consumer-facing-

Dennis Scully: I want to build a community.

Ariel Kaye: Yeah. I want to do the social media.

Dennis Scully: Who's going to do the numbers?

Ariel Kaye: I don't want to know what a number ... I don't need to know what numbers are.

Dennis Scully: Okay, so that's what you needed.

Ariel Kaye: [crosstalk 00:34:48] So yeah, I hired someone who had a background in finance and could build a model for me. And you know, we did our first buy plans using a linear regression model, which is not what you ever do to buy inventory.

Dennis Scully: Right.

Ariel Kaye: It's what you do to not buy inventory. So, it was just great. But it, you know, it's a means to the next step.

Dennis Scully: Sure, right. Okay.

Ariel Kaye: And then, we did bring on a planner. And she was with the company for many years. And you know, we did our best. And then we brought on a consultant who was a more experienced planner, and that was helpful. And we, you know, all of a sudden, we were told like, "By the way, X-percentage of your SKUs are going to X-percentage of revenue." So, you've got to like weight those. You can't buy evenly with like ... And you know, there was a lot of interesting learnings that happened in that time. But inventory is hard. And it only gets harder, really, as you have more products, and as you grow.

Dennis Scully: Right. As you start to scale, right?

Ariel Kaye: Yeah.

Dennis Scully: So inventory gets even harder, plus you're bringing everything in from these family-owned, European factories, right, which has its own challenges.

Ariel Kaye: Yeah, importing.

Dennis Scully: Yeah.

Ariel Kaye: That's the thing.

Dennis Scully: Yeah. So, there's a lot of challenges there along the way.

Ariel Kaye: A lot of challenges. Yeah, all of them.

Dennis Scully: Right. But, so what is it, 2015 now, 2016?

Ariel Kaye: Yeah. I mean, we can jump to any of those years, but yeah.

Dennis Scully: Well, I'm trying to get to [crosstalk 00:36:14] when it started to get a little easier for you, or-

Ariel Kaye: It just does ... No, it never does.

Dennis Scully: Has that not happened yet? Wait.

Ariel Kaye: I mean, I think every year, certain things get easier. And your focus can move to different things. So certain parts of the business become more like a well-oiled machine, but it's always growing and evolving, so nothing's ever the same. But as you have more data, and you have historical sales information, and things, you can make more informed decisions. And that is really helpful. And you know, my background in doing qualitative and quantitative analysis on people and customers has made me very focused on being a data-driven business from the beginning. And we've always tried to use our data to make more informed decisions, and to be more thoughtful in how we think through problems, and challenges, and solutions.

Dennis Scully: Sure. So staying with that, what were some of the most important metrics that you were looking at?

Ariel Kaye: I mean, there's traditional ones that you look at; you know, whether it's your average order volume, or your conversion rate, or you know, your clicks-to-conversion, or you know ... What else do we look at? We look at everything. Those are some of them ... I mean, you know, your repeat rate, how often people are coming back, what's your bounce rate. I mean, there's a lot of different metrics that we're looking at that gives us cues about different parts of the business.

Ariel Kaye: So, there's brand metics. There's marketing metrics. There's site metrics. And all of those metrics, when they're moving in the right way, or we set our goals around them, those tell us that the business is really healthy. And so if, all of a sudden, conversion rate drops, is it a site problem? Is it because we're out of inventory, so no one can buy what they want? You know, and we can figure out what to do or how to create a solve.

Dennis Scully: Okay. At what point did you realize that you were ready to start to open retail locations?

Ariel Kaye: Well, I was ready to open retail like immediately, but just because I was really excited. But you know, for us, our first retail store was opportunistic, in the sense that we were able to open it adjacent to our office. So, we moved into a new office. And I decided this would be a great time, if we could happen to find a space that was commercial, and allowed for us to work, and we could open this retail space, and we could be there, it would be a great way to test, and to also have the entire team be a part of it.

Ariel Kaye: And you know, we would hire retail staff, but we also could have every member of the team, as part of onboarding, work in the store, and get to know the customers, and see what was happening, and listen to what people cared about. And we could use the information from the store to impact all the parts of the business.

Dennis Scully: To inform everything else that you were doing. Okay.

Ariel Kaye: Yeah. And so, that happened. And we were able to find a space that worked. And so, we opened our first store. And what's great about the location is that a person coming into that store could not, would never know that there's an office behind it. So it's like, it's cool and sneaky in that way.

Dennis Scully: Yes, okay. So, they had no idea that there was this great, big operation happening behind the scenes?

Ariel Kaye: No. And it's funny, because you know, I mean, this happens almost every day, is that a customer will ask to use the restroom. And we're like, "Yeah, of course. You know, it's down that, like all the way down there." And they open the door, and everyone just, we get to watch their face when it's like, they're like, "Whoa. I had no idea this was back here." We're like, "Hi. Surprise, there's 40 people staring at you," so that's funny.

Ariel Kaye: But you know, it was a great success, immediately.

Dennis Scully: The store was?

Ariel Kaye: Yeah, the store. And it was awesome, and it was so fun. And you know, we saw the way people were engaging with the products. And we saw that they were more valuable customers, because they were spending more money, and they were coming back more frequently, and they were also shopping online, subsequently, after their in-store purchase. So, all of those things about behavior were good cues for us, that this was going to be-

Dennis Scully: So, coming in and interacting with the product made them even more excited, right?

Ariel Kaye: Yeah. And you know, people are coming in, and they're asking a million questions. And surely, these are the same questions they have online, but they don't have that person to ask them for. And it's just a different experience. And you know, then they leave, and they're these advocates for the brand. And they know everything about our brand, and all of these nuances, and things about the products. And then, they bring their friends back. And you know, they share, they spread the word. And we just, all of a sudden, have this like super fan, because they are armed with information, and they feel confident, and they're excited. And they come in, maybe, for a set of sheets, but then they buy towels. And then, they buy a gift for their friend. And you know, it just becomes this different environment.

Dennis Scully: And they become your brand ambassadors, yeah.

Ariel Kaye: Exactly. And they're so, yeah, they're just, they're purchasing ... There's lower return rates, because they're making the decision in person. They see everything. They see the options. They feel everything. So, yeah. I mean, we let that store have its moment. We started thinking about another store. We opened, that store opened in 2016. We opened one store in 2017. That was our second store in Portland. And then, this year-

Dennis Scully: There are several openings happening soon. Stay tuned for that.

Ariel Kaye: There are several openings happening in the next while, yes.

Dennis Scully: Okay, yes. And so, you actually brought on sort of a director of stores position, right?

Ariel Kaye: Yeah. [crosstalk 00:41:27] director of retail. He joined earlier this year, actually, which was perfect timing, because he got to open the New York store, which was-

Dennis Scully: Which was a madhouse, the opening. I mean, it was wall-to-wall.

Ariel Kaye: Oh, it was crazy.

Dennis Scully: Yes, seriously.

Ariel Kaye: It was absolutely insane. There was like a line out the door at one point.

Dennis Scully: There was.

Ariel Kaye: I was very overwhelmed.

Dennis Scully: I'm sure. I feel like you were sort of stuck in one place, and you couldn't-

Ariel Kaye: I was just stuck. And I had friends come in, and they were like, "Hi." And they were like, "I'm going to get a drink." And then they walked away, and then they come back. They're like, "I still can't reach you, but like, nice to see you. It looks good."

Dennis Scully: You were unreachable, yes. "Thanks for coming."

Ariel Kaye: [crosstalk 00:42:02] I was just like, "I don't know."

Dennis Scully: Yeah. You had to really come back another time to see what the store actually looked like, because it was impossible to tell.

Ariel Kaye: Yeah, which was, you know, it was fun. We opened during design week, which was, you know, so there were a ton of friends, and friends of the brand in town. And then, it also happened to be like a, there was like street fair or something happening on Crosby, here, too. So, it was just a really exciting time for the neighborhood, and for the design world.

Dennis Scully: Yes, yes. Well, and the neighborhood all seems to know you so well now, right?

Ariel Kaye: Well, yeah. And that's, I mean, part of-

Dennis Scully: That's part of your community building.

Ariel Kaye: Exactly. And so, you know, one of the things that we do when we open a new store is, we get to know our neighbors, and we see if there's ways that we can partner together. And so, you know, for the opening, we did a partnership with Birch Coffee. And we had baristas in the store, making coffee. And we did little, cute sleeves for them. And we did a partnership with Paintbox.

Ariel Kaye: And so, you know, we try to make sure that we're elevating and amplifying everyone in the neighborhood. And we want to, it just is more fun that way.

Dennis Scully: Yeah, absolutely.

Ariel Kaye: And one of the things that we knew going into this neighborhood is that they do have these block parties. They do have this whole network, and that was something that really drew me to the neighborhood, too, because it's just ... And it's already built into the whole ecosystem.

Dennis Scully: Yeah. And it's remarkable how SoHo has transformed in recent years. And I'm sure they're thrilled to have you as sort of a permanent resident, right?

Ariel Kaye: Yeah, it's fun.

Dennis Scully: Yeah. So, I mean, it went through a period where so many shops were sort of pop-up shops, and they'd kind of come for a little while, then go away-

Dennis Scully: Right. So, you're putting a stake in the ground, and this is going to be home for a while.

Ariel Kaye: Stake in the ground, yeah. We love it here.

Dennis Scully: Okay. That's great. And it seems like you like to be in places where you can build that kind of community, where some like-minded brands are already there.

Ariel Kaye: Yeah, absolutely.

Dennis Scully: So, where are you going next? What are some of the next destinations for Parachute?

Ariel Kaye: I mean, I think for us, one of the fun things that we get to do is, we look at these heat maps of where our customers are, and we see where they live. And we love to be amongst our tribe. It's a great way for us to have that community embedded as we open. And our hope is that they're excited to see us, and then they'll tell their friends. And you know, we know that we've got this built-in group of people around that are into what we do. And then, we can add more value, and we can do all the things that we love to do.

Ariel Kaye: So, I mean, we want to be where all of our customers are. So, we're looking at every big city, and we're looking at, even, some smaller cities. You know, we have a lot of stores that we're thinking about opening.

Dennis Scully: Well, so tell me about that, because I saw somewhere, in one of the things that was written about your recent investment round that you got, that you were thinking 20 stores by 2020. Does that sound-

Ariel Kaye: Yeah, so we've got [crosstalk 00:44:50]. Yeah, we've got a lot to do. I mean, we're ... You know, it could even be more.

Dennis Scully: Okay.

Ariel Kaye: So, we'll see what happens. But yeah, I mean, we're looking, you know, every city that you would think of.

Dennis Scully: Right, sure.

Ariel Kaye: And we're, you know, in some cities, we'll do more than one store. I mean now, we have two stores in LA. And it's been a few days of that, but so far, so good.

Dennis Scully: Well so, and do physical stores become distribution centers for you as well? And is that part of what's so great about having them?

Ariel Kaye: Yeah, absolutely, so that's the idea. I mean, I think for us, we can create these mini distribution centers. It can allow us to do fun things like same-day shipping. And it can allow customers, in the future, to see online where, like if they live in one area, how many of these items are in-store. You know, we want to make sure that we're creating this best-in-class experience. And so, part of that is the ease of getting the product, and getting it quickly. And so, that's definitely something that we've been thinking about, and that we're laying the foundation for, because that's really, I mean, that's a secondary, and in some ways it's a primary focus of what retail can do. It's these little hubs of, whether it's community distribution, whatever you need it to be.

Dennis Scully: Well, and this is what people sort of forgot about retail when everyone was saying the retail apocalypse was just going to wipe out every small retail store, right?

Ariel Kaye: Yeah.

Dennis Scully: There are all these sort of things that you can do in your community-

Ariel Kaye: Totally.

Dennis Scully: ... with retail stores, that you can't do online.

Ariel Kaye: Yeah. And we had some fun with that last year. Over the holidays, we had a pop-up in New York. And we did same-day shipping and same-day delivery. I guess that's sort of the same thing, but we did that. And it was really successful. You know, people were really thrilled to have that as a service. And you know, we offer that here in our store, like if you want, we can ship it, get it to your apartment the same day. You know, there's different things that you can do that are just helpful.

Dennis Scully: Sure.

Ariel Kaye: I mean, people have different needs. Some people just want to take it with them when they go. But, so it's been fun to test those strategies in different markets. And yeah, we look forward to being able to do it on a really broad scale.

Dennis Scully: Well, and as you say, there are so many repeat customers that come to this brand. And I mean, I saw it just when I was sitting on your sales floor for a little while, people that sort of came in, already had product in their hands that they had. They wanted to add onto it. So, they get the sensibility.

Dennis Scully: So for people that aren't familiar with Parachute, tell us what Parachute is today.

Ariel Kaye: Sure. So, we're a home essentials brand. We make modern bedding, bath, décor, tabletop, baby products. Everything is super high-quality. We don't use any toxic chemicals, artificial dyes, synthetic finishes. And really, we're building what we believe is to be a very cohesive, and easygoing, casual, but elevated collection of products that can enhance your everyday life and comfort.

Dennis Scully: Right, right. And we've learned so much about the impact that sleep has on you-

Ariel Kaye: Mm-hmm (affirmative), absolutely.

Dennis Scully: ... and your health, and your sort of mental wellbeing. We didn't understand that as fully, right, as we do now.

Ariel Kaye: Yeah. Yeah, absolutely. I mean, I think that that's something that always has been really fascinating to me, is that you invest in different parts of your life and your home. And you know, investing in sleep, and investing in your personal health and your comfort within your home is so important. And it can impact your health, and your happiness, and your productivity, and your ability to just function, like at a high level. And so, you know, I believe that this is, it's so important to take advantage of great products, and to really keep yourself top-of-mind when you're making these decisions. But our products are designed to last. You know, they're really well made. And yeah, we believe that everyone deserves a great night of sleep.

Dennis Scully: Well so, and your products also, I mean, we can talk a little bit about Oeko-Tex and some of what really makes your product very special from an environmental standpoint.

Ariel Kaye: Yeah, sure.

Dennis Scully: Because a lot of people might not be familiar.

Ariel Kaye: Yeah. So, all of our products are Oeko-Tex certified, which is a certification that means that there's no toxic chemicals, artificial dyes, or synthetic finishes throughout the entire manufacturing process. This was a path that I chose to take, because the word "organic" gets tossed around a lot, but there can be organic cotton. And then, you can have formaldehyde, or silicon, or all sorts of chemicals that are used throughout the manufacturing process. And you can still say that something's organic. So, we focus on using the highest quality fibers, and then making sure that the entire manufacturing process is as clean as possible. And we believe that that makes the end result the best product out there. You know, when you're using our products, you're using the raw materials, and their fibers, and their most authentic state. They'll continue to get better with use, which is what you want, because the alternative is that they'll fall apart with use.

Ariel Kaye: So, we've chosen to make sure that our products get comfortable, and more cozy, and soft, and continue to open up, as any good fibers would.

Dennis Scully: Right.

Ariel Kaye: And you know, and then our down is all Leaping Bunny certified. So you know, we're really cautious and mindful to only work with manufacturing partners that have the same sensibilities that we do, and care about the environment, and care about the things that you're using in a very intimate way within your home; because you don't need to sleep on formaldehyde every night.

Dennis Scully: Absolutely. And sort of, once people learn, really, what other products are really made with, I mean, it-

Ariel Kaye: Yeah. And you know, that's the thing, also, is that this is a category where there's not a lot of transparency, and there's not a lot of regulation. So, these aren't always on the packaging of products ... Or having formaldehyde, you know, the way that you get wrinkle-resistant sheets is through toxic chemicals, you know?

Dennis Scully: Sure, sure.

Ariel Kaye: So, I don't think that people always ... And it's with good reason. You know, it's just the information is not as readily accessible unless you're really looking for it, you know ... know what to look for. And so, we try to take that guesswork out of the equation, so that when you purchase from Parachute, you can always purchase with confidence. And you know that there's not going to be creepy, gross products, and coatings, and things.

Dennis Scully: Well, and as you said before, this market got very confused by the whole thread count issue, right?

Ariel Kaye: Yeah, absolutely.

Dennis Scully: And so, people got very misguided, looking for a huge number, and what all that meant-

Ariel Kaye: Exactly, and that doesn't matter. And so, you know, there's a lot of marketing gimmicks, a lot of confusing things that retailers or brands do to try to inflate value in the eyes of the customer. And you know, I think for me, it's been really important since day one to introduce products that people understand, and that they can purchase with confidence; because I think, at least for me, personally, I feel way better about the things that I buy when I can buy them knowing that they're well made, and that I, you know ... I don't want to be questioning my decision, and feeling like, you know, "Is this the right thing for me? Is this a bad product?" So, we really strive to have that confidence, and that clarity around our decisions, and how they impact the product.

Dennis Scully: So, one of the things that comes up a lot when I talk to online-native businesses, is customer acquisition costs, right? And is that a big issue for you as well? Is that where a lot of the money has to go?

Ariel Kaye: We spend a good amount of money, yeah. I mean, I think for us, it's always been about, how do we tell our story? So, the goal is obviously acquiring customers, but we want to do so in a way so that when people land on our site, they know why they're there. They have some sort of sense of what we do, what differentiates us, and they know what to look for. And so, we focus on acquisition tactics that allow us to tell our story. We've also spent a lot of time over the past two years diversifying our acquisition channels, so that we're not just acquiring customers online. We're not just acquiring customers offline. You know, we're kind of thinking about how to keep our marketing mix fresh, and supporting different channels, across channels. And stores are a big part of that, too, because once we have a real place for people to drive traffic to, it also helps offset costs.

Ariel Kaye: But yeah, I mean, it will always be an expense. And it will always be part of the challenge and the opportunity, is how do we keep getting new people interested and excited about the brand, as well as keeping our existing customers inspired and excited about the brand.

Dennis Scully: Right, right. So, we mentioned that recently, you got another funding round; the largest one so far, right?

Ariel Kaye: Yeah.

Dennis Scully: So, congratulations on that, right?

Ariel Kaye: Thank you.

Dennis Scully: And so, is most of that money going towards all of these new retail stores that were going to open around the country?

Ariel Kaye: It's definitely a big part of it; I mean, retail, acquisition, you know, technology. We're really still invested in our digital presence, and making sure that we have the best digital experience as well, and that our data's working in a clean and effective way. But yeah, I mean, retail and awareness are two big parts of where we're going to be focusing. But we're really excited about the opportunity to scale the business and take the business to the next level. And you know, we're never going to not focus on quality and customer experience, and those are my passions. And so, you know, we're excited to grow, but we won't grow at the expense of forgetting where we came from, if you will.

Dennis Scully: Okay, okay. I like that.

Ariel Kaye: Yeah.

Dennis Scully: And product expansion, I mean, as you look out over the next few years, are there other parts of the home that you want to get into, that you're dying to get into?

Ariel Kaye: Absolutely, yeah. We want to be all over the home.

Dennis Scully: You do?

Ariel Kaye: Yeah. I mean, you know, we're doing it in our own way. So, we want to ... But you'll see more statement pieces from us. You'll see more new categories. You'll see us going deeper in existing categories. There's a lot of new, exciting things. A lot of them are happening, even, next year.

Dennis Scully: Is that right?

Ariel Kaye: Yeah.

Dennis Scully: Okay. So, we'll look forward to that.

Ariel Kaye: Yeah.

Dennis Scully: Excellent, all right. Well, that seems like a good place to leave it.

Ariel Kaye: Great.

Dennis Scully: Thank you so much for-

Ariel Kaye: Absolutely.

Dennis Scully: ... letting me come and hang out in your basement.

Ariel Kaye: My pleasure, any time.

Dennis Scully: It's been great. My guest has been Ariel Kaye, founder and CEO of Parachute.

Dennis Scully: Thank you again for joining us, this show is Business of Home and I'm Dennis Scully. If you like what you hear, please feel free to subscribe, tell a friend about the show, and most of all leave us a review on iTunes. Thank you again to our sponsors and our producers. You can find us at businessofhome.com or on Facebook or Instagram. We'll see you next week.